Copyright Notice from Kodakone demanding 1250 Euros for an image

I have a blog titled Facts Legend (https://factslegend.org/). The blog came into existence in 2014 (April). On October 12, 2014, I posted a blog and used an image. The image that I used was from Google search. Back then I was not aware of all the fuss about copyright (international and national laws) and so, I used the image that I found. Fast forward 2020, I received an email from Kodakone Post-licensing team pointing to that image and stating that it was a copyrighted image owned by Blaublut-Edition. Kodaone is a new company that started operation in 2018-2019 as a new blockchain and post-licensing company that uses reverse image search technology to find websites that used the images that say are owned by Blaublut-Edition. Blaublut is an image licensing company located in Germany and Kodakone is also a company from Germany. Since Blaublut is an image licensing company, technically, the image is owned by the creator and not Blaublut itself. They only create a license for use. None of those technicalities really matter to me because eventually the image is hosted on Blaublut's site and it cannot be downloaded without a watermark (that too a low-resolution image). The image I took from Google was from some other website and the image widely circulates on the internet on at least 40+ websites. Ever since I received the email from Kodakone, I removed the image from my blog and server. Kodakone has not sent any Cease-and-Desist notice. It directly sent me an invoice of 1250 Euros and is asking me to pay the amount in full to settle outside of court and prevent legal and cost escalations. They are asking me to pay that money to get a retroactive license for the image. My blog doesn't make that kind of money in the first place. I did not receive any cease-and-desist notice. I used the image in complete error with no intentions of copyright infringement. Over time I have learned about the copyright issues and now I use only stock images and videos which come with commercial use license (yes, my blog has been monetized through ads) or I use images from Public Domain and provide proper source and credit info. Back in 2014 when I was new to blogging, I had no idea of all these things. I garnered the knowledge over time. I did some search online and found that Kodakone does send such emails to bloggers and website owners worldwide. Many have sought legal advice online and they have been asked to simply ignore those emails or ask Kodakone to provide proofs of copyright ownership and right to conduct collection activities in other countries. What should I do now?